A person makes an unauthorised import of goods liable to confiscation. After adjudication, Assistant Commissioner provides an option to the importer to pay fine in lieu of confiscation. It is proposed to impose fine (in

CS Professional · Advanced Tax Laws and Practice · PYQS · December 2017
A person makes an unauthorised import of goods liable to confiscation. After adjudication, Assistant Commissioner provides an option to the importer to pay fine in lieu of confiscation. It is proposed to impose fine (in lieu of confiscation) equal to 50% of margin of profit. The following particulars are made available: (i) Assessable value: ₹15,00,000 (ii) Total duty payable: ₹6,00,000 (iii) Market value: ₹25,00,000 You are required to narrate the provision and calculate amount of fine and total payment to be made by importer to clear the consignment.

Answer & Explanation:

Computation of amount of redemption fine and total payment to be made by the importer Assessable Value or Purchase cost of goods ₹15,00,000 Add: Customs Duty ₹6,00,000 Total Cost of goods ₹21,00,000 Market Value of Goods ₹25,00,000 Margin of Profit ₹4,00,000 Proposed Amount of fine = 50% of margin of profit ₹2,00,000 Maximum fine: As per proviso to sub - Section (1) of Section 125 of the customs Act, 1962. Redemption fine should not exceed the market price of the goods confiscated minus the duty chargeable there on maximum Redemption fine = Market price of goods Confiscated - Duty chargeable = ₹25,00,000 - ₹6,00,000 ₹19,00,000 Since, the proposed amount of fine is less than the maximum amount of fine permissible, The redemption fine payable by the importer would be ₹2,00,000 The total payment to be made by the importer to clear the consignment = ₹6,00,000 duty + ₹2,00,000 fine ₹8,00,000

Topics: Customs Act, 1962

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